Fluctuating money value;Moving;

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36 HASKINS & SELLS May
ARNOLD, B U R K E & C A M P B E L L SYNDICATE
S T A T E M E N T OF O P E R A T I O N S FOR T H E Y E A R ENDED
D E C E M B E R 31, 1918.
Profits on trading:
Prairie Oil & Gas Company $2,472.92
Seneca Petroleum Company 700.00
Total profits on trading.. $3,172.92
Loss on trading — Hazeltine
Copper Company 25.00
Net profit on trading $3,147.92
Dividends from stocks owned 3,000.00
Total income $6,147.92
Deduct — Interest — net 754.92
Net income for the year..... 5,393.00
Add—G. M. Campbell's share
of increase in value of stock
due to revaluation at date
of his retirement (October
19, 1918) ... 3,858.33
Total $9,251.33
Deduct—Profits distributed to
G. M. Campbell at retire­ment
4,907.40
Undivided profits — December
31, 1918 $4,343.93
Capital at beginning of year. .$75,000.00
Add—capital contributions:
F. B. Arnold....$10,000.00
A. S. Burke.... 10,000.00 20,000.00
Total $95,000.00
Less—Withdrawals of capital
by G. M. Campbelll 25,000.00 70,000.00
Capital—F. B. Arnold and A.
S. Burke — December 31,
1918 $74,343.93
E X H I B I T "B"
Fluctuating Money Value
IF prices have risen so that the purchasing
power of $1.00 now is only 60% of
what it was in 1914, should this effect in
any way be reflected in the accounts?
A thesis submitted recently at one of the
universities had as its subject "The Effects
of the Fluctuations in the Value of the
Monetary Unit on the Balance Sheets of
Corporations." The argument set forth
was substantially as follows: Commodity
prices are constantly fluctuating; therefore,
the purchasing power of the dollar is
constantly changing. Accounting which
does not consider these fluctuations does
not give true expression to financial results.
Consequently, balance sheets should show
the effect upon the factors of financial con­dition
of fluctuations in the value of the
dollar.
Index numbers were offered as the
means of determining the extent of the
fluctuations.
We shall be interested to hear what
opinions, if any, members of the staff hold
with regard to the practical or theoretical
propriety of such procedure.
Moving
AS the Bulletin goes to press this month,
the New York office presents an un­wonted
appearance. A band of painters
and plasterers has invaded the premises.
They mount on ladders or crouch unex­pectedly
behind doors, a trap for the
unwary. Partitions are falling and rising
again in a new place over night. The smell
of paint is borne on the spring breeze;
fresh varnish gleams on the woodwork.
In the midst of this changing scene, packers
are busy, piling filled cases one upon the
other, tagging and labeling furniture and
other movable objects, in preparation for
the day of removal now so near.
Meanwhile work goes on as usual; like
time and tide, it waits for no man.
This general appearance of upheaval,
which under ordinary circumstances might
be thought somewhat racking to the nerves,
and which in itself is unimportant, is never­theless
a sign of greater things. It accom­panies
an epoch in the firm's history. It is
part of the shaping of the new organi­zation.
For this reason we who are living
in this state of flux and apparent confusion
have thought it worth while to fix the pic­ture
for the moment in our minds. In the
history of the firm this is a noteworthy
time. To assist in the process of evolution
is a stirring experience.